Circular economy could save 11% of annual global water demand, research finds

The adaptation of circular economy methods in water-stressed regions could save 412 billion cubic metres of water each year, the equivalent to 11% of annual global water demand, according to new research from multinational banking group ING.

Global fresh water demand is expected to grow by 2% each year over the coming decades

A report from the Dutch firm has analysed the circular potential in six regions including California, Netherlands and Bangladesh. The study found that circular water measures, ranging from water demand reduction to increasing water availability through re-use and retention, can significantly reduce water shortages in these stressed regions.

California is cited as a prime example, where circular approaches have been shown to almost have the number of years of anticipated shortages. Research suggests that for the years for which shortages remain throughout the period 2017-50, these are likely to be reduced by more than 90%.

ING notes that applying the principles of the circular economy offers a range of new business opportunities in the water supply chain, particularly in the field of efficient irrigation techniques, sustainable water pumping as well as water treatment and re-use.

The report reads: “Business opportunities arise across the whole water supply chain. From research and consulting activities, through to engineering and construction activities, to maintenance activities. This involves skilled labour and therefore requires programmes to educate people.”

Global fresh water demand is expected to grow by 2% each year over the coming decades. This demand will outstrip the sustainable water supply in 2040 by 35% if no changes are made, according to research.

The ING research states that circular economy approaches can provide an alternative to desalination projects, which often generate considerable carbon and ecological footprints. The report does concede that in areas where water shortages are only slightly alleviated by the circular economy, such as the United Arab Emirates (UAE), desalination will continue to play a crucial role in addressing the issue.

Cascade of risks

Transitional efforts to a low-carbon economy hinge on a global ability to tackle the water scarcity climate crisis. A World Resources Institute (WRI) report from 2015 suggested that, by 2040, 33 countries would be at risk from water-stress.

Last November, businesses were issued a "wake-up call" by a CDP report which revealed that water risks fuelled by climate change cost the private sector $14bn (£11.3bn) over the previous year.

Fortunately, a number of external business drivers have emerged that place water stress and security at the heart of forward-thinking companies. The largest of these drivers is the UN's Sustainable Development Goals (SDGs). Goal Six calls on businesses to “ensure availability and sustainable management of water and sanitation for all” and efforts are being made to achieve this.

Many companies are already acutely aware of the risks that water security poses and have started to take steps to protect their business models. For instance, multinational firm PepsiCo has revealed that its water stewardship efforts have led to a 26% reduction in operational water usage since 2006 - exceeding its initial 20% goal.